2008 Market Collapse. * A challenge to my understanding

From my understanding. Something was going around prior to the 2008 Market Collapse. Something that was going from one set of hands to another and it made itself around the world. Did the people know they shouldn’t of done it?

I feel that’s what’s going around with bitcoin.

The “Leader” “Leaders” in the decentralized revolution are no different in behavior than the Crazy of before. But at least Crazy People don’t know they are crazy.

I might be wrong on this, just going by reports and such. Some people argue this.

But that’s what it feels like.

In respect to the Environment…

“shouldn’t have done it?”

or

“shouldn’t’ve done it?”

Actually, it was quite simple if you take a broader view on what happened. And no, it has nothing to do with what’s going on right now.

The idea of U.S. policy to increase ownership of housing and increase the wealth of their citizens was implemented by lowering interest rates. Even with the low interest rates, there was a high amount of money looking for high margin. This lead to ever lower lending standards and finally money for sup-prime customers. At some point American banks found out that that business model is not sustainable.

Instead of trying to fix the business, they had the idea to sell that problem overseas. Funny enough, that worked pretty well, because they promised high margins without much of a risk. With the help of their rating agencies they made buyers believe that the dept will we payed back and the papers are safe. Because the buyers did not understand what they are getting and some kind of FOMO (yes that also happens with institutional traders) the dept was sold to UK, German, Ireland, Singapore and some other banks.

When the foreclosures began and lenders disappeared in masses the contracts blew up. The money was gone and the international financial institutions that fell for it, have been faced with the reality.

The rest is history. I don’t blame policy and there where many more things going on in the background, but that’s basically the story. The problem is that the financial system has not been repaired as of today. We still have 0% interest rates from the national banks and huge QE programs in place.

Since QE has somehow worked for the financial crisis in 2008 - national banks believed it would also work fighting the pandemic. That was a serious error, because of the very different nature. Now they have to figure out how to get out of it.

How do I know about things? I’ve been working (software not trading) at that time for the treasury system of a bank. After the crisis that bank was shut down.

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In case you have NetFlix there’s a nice docu that tries to explain what happened. Boils down to corrupt governments, banks, funds, regulations (the lack of those), greed… https://www.netflix.com/us/title/70139555?s=a&trkid=13747225&t=cp&vlang=en&clip=81358327

I assume nothing that we don’t have in the present, maybe just in a slightly different packaging.

You want to connect current events?…digital money :moneybag: s coming… hope ADA gains in value.

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Very Insightful. Thank You.

This question has been rattling around my head for some time. I decided to sell part of the purchased cryptocurrency and buy gold…don’t even know how correct my decision is.

CBDCs serve a wholly different purpose then the usual crypto currencies like ADA. You can compare them more with exchange cryptos like CRO or BNB, but even that does not really work.

CBDCs would allow national banks to better control the amount of their national bank’s currency in circulation. There was once the discussion (in academics mostly) to exclude the banks from creating money (giral money) by giving loans without having to get it from the national bank beforehand. It was called something like “national bank only money”. There was even a poll in Switzerland about this topic. Swiss people decided against it.

CBDCs work as follows: instead - or in addition - to an account with a bank you can get money into wallet that was created only by the national bank. In other words banks cannot create CBDC money themselves - like they can do now with the current system. As long as both systems exists in parallel nothing will change that much, because when you ask your bank for a loan you’ll still get it the old way. The big change would come as soon as banks are no longer allowed to use non-CBDC money.

Conclusions: the introduction of CBDC money does not change anything - especially not creating (additional) inflation - as long as is used in parallel to the current money flow. And if CBDC is required for transactions it is just the opposite, i.e. only national banks control the amount of money in their currency (not anymore in tandem with banks).

But of course the are some (negative) side effects, like the possibility that the issuer can track who is spending for what.

Now what does that mean for BTC and alt coins? Since CBDCs will be issued from national banks they’ll follow the same policy as it is now. They are not a threat to cryptos per se. And the introduction of CBDCs alone does not change anything - governments have to change their laws for having some real effect. And that effect can be achieved without CBDCs as well - it just easier to use them as an excuse.

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I liked the movie Margin Call - Wikipedia because it showed how our financial systems works and who controls it.

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if y want some answers go decades back and check where people put their money to…we are at some sort if war regarding the artificial pandemic situation. Who will prevail? the moral and ethical as we are all tired of bullshit. Crypto is freedom… but also risk.

One more comment: if you want compare CBDC with some crypto already existing, then the best ones would be stable coins. CBDC - from a technical point of view and not from a social one - are like stable coins backed by national banks. Like a $ CBDC would guarantee a 1:1 value to fiat $. And - of course the amount of $ CDBC in circulation would be controlled by the Fed.